3.Cashasapercentofafirm’srevenues.Thismeasuresthe
linkage(ifoneexists)betweencashholdingsandoperations.
Figure10.3providesthedistributionofcashasapercentof
revenuesforcompaniesintheUnitedStatesinJanuary2005.
Themedianforthismeasureis3.38percent,butthereisa
largenumberofpositiveoutlierswiththismeasureaswell.
Manyyoung,high-growthfirmshavecashthatexceeds 100
percent of revenues in the most recent financial year.
FIGURE 10.1 Cash as a Percent of Firm Value
(Market)—U.S. Companies
FIGURE 10.2Cash as a Percent of Book Value of Assets